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Mississippi Businessman Sentenced to 18 Years in Prison For $288 Million Tricare Fraud Scheme

George F. Indest III with 30+ years of experience, is Board Certified in Health LawBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On January 15, 2021, a Mississippi man was sentenced to 18 years in prison by a federal judge for his role in a $287.6 million scheme to defraud the Tricare health benefits program. According to the U.S. Department of Justice (DOJ), he committed fraud by paying doctors and drug distributors kickbacks.

What is Tricare?

Tricare is the health care benefit program serving active-duty military personnel, military retirees, and their dependents worldwide. The program provides comprehensive coverage to all beneficiaries, including health plans, special programs, prescriptions, and dental plans. Learn more about Tricare here.

Conspiracy to Commit Health Care Fraud and Money Laundering.

In July 2020, he pled guilty to orchestrating a $287.6 million scheme to defraud Tricare by paying doctors and drug distributors kickbacks. The kickbacks were in exchange for unnecessary compounded medication prescriptions sent to his pharmacies. He admitted to tampering with drug formulas and bribing doctors to authorize prescriptions to rake in reimbursements from the federal benefits program. Read the complaint in full.

More Details of the Fraud Scheme.

According to the government, from 2012 to 2016, he used marketing companies, drug distributors, and compounding pharmacies that he owned to contract with other pharmacies to provide prescriptions for the medications.

He admitted to creating prescription pads with the drug formulas for doctors to push the expensive drugs onto patients easily. In exchange for participating in the fraud, doctors got a cut of the pharmacy benefits managers and programs’ reimbursements.

Additionally, he and his co-conspirators conducted illegal wire transfers of millions of dollars in illegally obtained cash to various companies and bank accounts. The government said he personally obtained more than $40 million from the scheme.

As part of his plea agreement, he is ordered to forfeit more than $50 million worth of property, luxury cars, and an airplane. He was also ordered Friday by U.S. District Judge Keith Starrett of the Southern District of Mississippi to pay $287,659,569 in restitution. Click here to view the plea agreement.

To read about a similar Tricare fraud case in Florida, click here to read one of my prior blogs.

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists, pharmacies, doctors, and medical groups in DEA, DOH, FDA, OIG, and DOJ investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections, and audits. The Firm also represents both plaintiffs (whistleblowers or relators) and defendants in False Claims Act (whistleblower or qui tam) cases. The firm’s attorneys include those who are board-certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (888) 331-6620 and visit our website at www.TheHealthLawFirm.com.

Sources:

Clough, Craig. “Miss. Businessman Gets 18 Years For $288M Tricare Fraud.” Law360. (January 15, 2021). Web.

Stawicki, Kevin. “Miss. Businessman Pleads Guilty To $288M Tricare Fraud.” Law360. (July 10, 2020). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave. Suite 1000, Altamonte Springs, Florida 32714, Phone: (407) 331-6620 or toll-free: (888) 331-6620.

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2021 The Health Law Firm. All rights reserved.

 

Judge Refuses to Dismiss $21 Million Suit against Florida Pharmacy Alleging Illegal Kickback Scheme

George Indest HeadshotBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On February 13, 2019, a federal judge turned down a Florida pharmacy’s motion to dismiss a $21 million False Claims Act (FCA) suit, but allowed its sister company out of the suit. The judge said Z Stat Medical LLC, which operates as Oldsmar Pharmacy and its owner, must face the government’s claims that it engaged in illegal kickback schemes to defraud Tricare. Oldsmar’s sister company, Stat Direct LLC, was dismissed from the lawsuit completely. There was no evidence it was also involved in the alleged misconduct, according to court documents.

The First Alleged Scheme.

The case was originally brought as a result of a whistleblower complaint that alleged two schemes to defraud Tricare. The first scheme was allegedly a deal between Oldsmar and Centurion Compounding Pharmacy. Centurion was alleged to have hired sales reps as independent contractors. The sales reps marketed costly compounded medications, usually creams for pain and scars, to Tricare beneficiaries. Patients recruited by the sales reps were told to send their prescriptions to Centurion, which then directed them to Oldsmar to fill. The sales representatives would then get part of the reimbursement profit, according to the complaint.

In total, Tricare was stated to have paid about $18 million for these bogus claims, and Oldsmar was alleged to have paid about $6.1 million in kickbacks in a little over a year, the suit says.

The Second Alleged Scheme.

The second alleged scheme involved companies that included Health Savings Solutions and Vici Marketing. Oldsmar allegedly worked with Vici Marketing and published online advertisements offering free consultations. Referrals were funneled through Health Savings Solutions for compounded pain creams. These prescriptions were written and filled, without a patient ever seeing a doctor in person, according to court documents.

According to the government, from September 2014 to February 2015, Oldsmar Pharmacy filed 700 prescription claims with Tricare based on referrals from Health Savings Solutions. In return, Oldsmar Pharmacy paid a 41 percent kickback to the marketers. This resulted in Tricare paying out about $3.4 million. Oldsmar made $5.5 million in payments to Health Savings Solutions, including three payments of about $1 million each, according to the complaint.

Click here to read the complaint in full.

Liable for False Claims.

Judge Hernandez Covington said the government pled the allegations sufficiently to keep Oldsmar and its owner in the case. The government has also satisfactorily alleged that Oldsmar’s owner has enough of an understanding of the Anti-Kickback Statutes (AKS) to have known better, according to the Judge.

While Oldsmar Pharmacy did return $19 million to Tricare, the FCA calls for treble damages Three times the amount), so the company can’t avoid litigation, the judge said, adding that she’ll deduct the $19 million from any final amount determined top be owed.

Click here to read the judge’s order in full.

To read about a case Judge Hernandez Covington made a similar ruling on dealing with a Florida Compounding Pharmacy’s FCA Suit, click here to read one of my prior blogs. (https://www.thehealthlawfirm.com/blog/posts/federal-judge-refuses-to-dismiss-florida-compounding-pharmacys-fca-suit.html)

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA, DOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources:

Kass, Dani. “Pharmacy Must Face $21M Prescription Kickback Suit.” Law360. (February 13, 2019). Web.

“13 IN TAMPA CHARGED AS PART OF NATIONAL HEALTHCARE FRAUD TAKEDOWN.” Tampa Bay Reporter. (June 29, 2018). Web.

Hale, Nathan. “Feds Want FCA Suit Over $21M Kickback Scheme To Proceed.” Law360. (January 28, 2019). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2019 The Health Law Firm. All rights reserved.

By |2019-02-21T18:20:05-05:00February 21st, 2019|Categories: Pharmacy Law Blog|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |0 Comments

Florida Pharmacy Hit With FCA Suit for Illegal Kickback Scheme Targeting Tricare

George IndestBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On October 19, 2018, the federal government filed suit against a Florida pharmacy for allegations of illegal kickback schemes involving industry marketers. The U.S. Attorney’s Office for the Middle District of Florida alleges that Oldsmar Pharmacy was involved in illegal schemes that resulted in the federal Tricare program paying more than $21 million in reimbursements for prescriptions and False Claims Act (FCA) violations.

Suit Filed on Behalf of The Defense Health Agency (DHA).

The federal government filed the suit on behalf of the U.S. Department of Defense, including its Defense Health Agency (DHA). The DHA administers the Tricare program, which provides health insurance for active duty military personnel, military retirees and their dependents.

The government is seeking treble damages, civil penalties and restitution, based on its claims that the pharmacy submitted claims to Tricare for reimbursement for prescriptions of costly compound medications. The government claims that they knew were fraudulent under the FCA because of the kickbacks paid to marketers.

On October 18, 2018, the U.S. Department of Justice (DOJ) released a press release announcing the involvement of three military members in the scheme as sales representatives for Centurion Compounding, Inc. All three were indicted for paying kickbacks to Tricare beneficiaries to obtain prescriptions for compounded medications. You can learn more about this in the section below.21

Click here to read the DOJ’s press release.

Former Whistleblower Suit.

The lawsuit against Oldsmar Pharmacy and company President, Larry Smith, stems from a whistleblower suit filed in 2015 by Jennifer Silva and Jessica Robertson, former employees, according to the complaint.

The schemes allegedly occurred between September 2014 and February 2015 by Smith and Oldsmar and different pharmacy services administration organizations.

Tricare Reimbursements and Kickback Schemes.

According to the complaint, Centurion Compounding Inc., hired sales representatives as independent contractors who marketed costly compound medications to Tricare beneficiaries. Patients recruited by the sales reps were directed to send their prescriptions to Centurion, which then directed them to Oldsmar pharmacy.

From November 2014 to February 2015, Tricare paid about $18 million for approximately 4,000 claims for compound prescriptions as part of the kickback scheme, according to the federal government. Oldsmar paid Centurion more than $6.1 million in kickbacks, some of which was distributed to the individual sales representatives involved.

Additionally, prosecutors claim that pharmacy President, Larry Smith, entered into a second kickback scheme with several marketing companies. These companies published online advertisements offering free consultations for pain creams via telemedicine, without ever seeing a physician in person. In return, Oldsmar Pharmacy paid a 41 percent kickback to the marketers, the complaint alleges.

Click here to read the complaint in full.

The suit brings forward false or fraudulent claims; recovery of payments made by mistake by Tricare; and unjust enrichment. To learn more, click here to read one of my prior blogs on a similar case.

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA, DOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The Firm also represents both plaintiffs (whistle blowers or relators) and defendants in False Claims Act (whistle blower or qui tam) cases. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources:

Hale. Nathan. “Fla. Pharmacy Hit With False Claims Suit Over Kickbacks.” Law360. (October 19, 2018). Web.

Stringini, Mary. “St. Pete doctor pleads guilty to receiving kickbacks, BMW in $5.3 million pharmacy conspiracy.” ABC Action News. (March 8, 2018). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.

KeyWords: Pharmacy legal representation, False Claims Act defense attorney, FCA legal counsel, Anti-Kickback Statute (AKS) defense attorney, legal representation for allegations of violating Anti-Kickback Statute, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations representation, pharmacy representation, pharmacy defense attorney, pharmacist representation, pharmacist defense lawyer, TRICARE fraud attorney, The Health Law Firm, fraud investigations representation, health care fraud defense lawyer, compounding pharmacy lawyer, prescription reimbursement leagl representation, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2019 The Health Law Firm. All rights reserved.

Florida Pharmacist Gets More Than Six Years in Prison For Role in Compounding Fraud Scheme

Attorney George F. Indest IIIBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On November 29, 2018, a Florida pharmacist was sentenced to six and a half years in prison and ordered to pay $3.4 million, for her role in a scheme to defraud the government. Marjorie Robinson pled guilty one count of conspiracy to commit health care fraud for submitting fraudulent claims to Tricare, Medicare and private insurance programs for compounded creams that were not necessary.

The Fraud Scheme.

According to the U.S. Department of Justice (DOJ), Robinson was one of three owners of ASC Pharmacy Inc., a now defunct compounding pharmacy in Miami. Under her direction, the pharmacy made compounded creams that were made to maximize reimbursement from government and private insurance programs, not for patients needs, according to the plea deal. Click here to read the press release from the DOJ.

The other owners were charged separately and have also pled guilty.

This isn’t the first time a Florida pharmacy has defrauded government programs like Tricare, click here to read one of my prior blogs on a similar case.

Health Care Fraud Should Not Be Taken Lightly.

We have been consulted by many individuals, both before and after criminal charges were brought for fraud or related offenses. In many cases, those subject to Medicare and Medicaid fraud audits and investigations refuse to acknowledge the seriousness of the matter. Some may even decide not to spend the money required for a highly experienced health attorney to defend them.

Click here to read one of my previous blog posts regarding Medicare and Medicaid audits.

The government is serious about combating health care fraud. It created a Medicare Fraud Strike Force in March of 2007, in an effort to further prevent and eliminate fraud and abuse of government health care programs. False claims are a growing problem in the program, costing the government billions of dollars each year. Accordingly, punishments for defrauding the system can be quite severe.

If you are accused of Medicare or Medicaid fraud, realize that you are in a fight for your life. Your liberty, property/possessions and profession are all at stake. Often it is possible to settle allegations of fraud by agreeing to pay civil monetary penalties and fines. If given such an opportunity, the provider should consider whether it is worth the risk of facing decades in prison. Be prepared to give up whatever you need to in order to avoid a conviction and preserve your liberty.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent pharmacists and healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also defend pharmacists, physicians, pharmacies and medical groups in actions by Tricare, Medicare, Medicaid and private insurers to recoup overpayments, obtain civil fines and penalties and take other actions against them. They represent pharmacies and pharmacists in DEA actions and administrative (Order to Show Cause ) hearings, Medicare Fraud Control Unit (MFCU) investigations, and administrative and civil litigation, physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Sources:

Bolado, Carolina. “Fla. Pharmacist Gets 6½ Years For Bogus Claims For Creams.” Law360. (November 29, 2018). Web.

“South Florida pharmacist sentenced to more than six years in prison for role in $3.4 million compounding pharmacy scheme.” MD Linx. (November 30, 2018). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: Legal representation for pharmacists, pharmacy lawyer, legal representation for pharmacies, pharmacists lawyer, legal representation for healthcare fraud, health care fraud representation, healthcare fraud defense lawyer, legal representation for submitting false claims to the government, False Claims Act defense attorney, FCA legal counsel, FCA defense lawyer, Anti-Kickback Statute (AKS) defense attorney, FCA representation, legal representation for allegations of violating Anti-Kickback Statute, AKS representation, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, Medicare audit defense attorney, ZPIC audit defense lawyer, RAC audit defense legal counsel, pharmacy Tricare audit defense attorney, Medicare pharmacy defense lawyer, Medicaid audit of pharmacy defense counsel, pharmacy defense attorney for overpayment demand, pharmacy civil fine defense attorney, pharmacy DEA defense attorney, pharmacy Order to Show Cause (OTSC) defense lawyer, Medicare Fraud Control Unit (MFCU) investigation defense legal counsel, pharmacy administrative and civil litigation attorney, health care fraud defense legal representation, TRICARE fraud attorney, health law defense attorney, health care fraud defense attorney, The Health Law Firm, representation for health care fraud investigations, compounding pharmacy lawyer, prescription reimbursement representation, pharmacy defense attorney, pharmacist defense lawter, representation for pharmacies, representation for pharmacists, legal representation for health care facilities, representation for health care professionals, legal defense of TRICARE providers, U.S. Department of Justice (DOJ) investigation representation, DOJ defense attorney, representation for DOJ matters, attorney reviews of The Health Law Firm, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.

By |2018-12-26T19:49:51-05:00December 26th, 2018|Categories: Pharmacy Law Blog|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |0 Comments

Florida Pharmacy Owner to Serve 15 Years in Prison for $100 Million Billing Fraud Scheme

George F. Indest III HeadshotBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On April 26, 2018, the owner of several Florida pharmacies was sentenced to 15 years in prison and ordered to give up $54.5 million in restitution. Nicholas A. Borgesano Jr., owner of A to Z Pharmacies, pled guilty to his role in a $100 million scheme involving bogus insurance reimbursements for prescription drugs.

He pled guilty in November to charges of conspiracy to commit health care fraud and conspiracy to engage in monetary transactions in property derived from specified unlawful activity, according to the order. Click here to read more.

Health Care Billing Fraud Schemes. 

According to prosecutors, Borgesano was at the center of an alleged scheme in which the pharmacy owner used his six stores to peddle prescription compound medications. He would then submit fraudulent reimbursement claims to Medicare, Tricare and private insurance companies.

Borgesano and his co-conspirators are accused of manipulating billing codes in the reimbursement claims and submit claims for pharmaceutical ingredients they didn’t even have. Additionally, he used one of his pharmacies in Florida as the hub of operations and paid his co-conspirators through shell companies, checks and the purchase of assets, prosecutors said.

From the pharmacy owner and his group of conspirators, the U.S. Department of Justice (DOJ) has seized $7.6 million worth of property, including several luxury vehicles and a 50-foot racing boat, the DOJ said. To read more about the co-conspirators, click here to read the press release issued by the DOJ.

To read the judgement in full click here.

The expensive prescription medications and creams involved in this case have been targeted by prosecutors in a handful of other Florida suits alleging Medicare and Tricare fraud by pharmacy owners and others. Click here to read one of my prior blogs involving a similar case.


Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEADOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigationadministrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources:

Greene, Kat. “Pharmacy Owner Gets 15 Years For Role In $100M Scheme.” Law360. (April 27, 2018). Web.

Manning, Margie. “New Port Richey pharmacy owner sentenced in $100 million fraud scheme.” Tampa Bay Business Journal. (April 26, 2018). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: False Claims Act defense attorneyFCA legal counselFCA defense lawyer, Anti-Kickback Statute (AKSdefense attorneyFCA representation, legal representation for allegations of violating Anti-Kickback StatuteAKS representation, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, FCA violations attorneyhealth care fraud representation, TRICARE fraud attorneyhealth law defense attorneyhealth care fraud defense attorney, The Health Law Firm, representation for health care fraud investigations, compounding pharmacy lawyer, prescription reimbursement representation, pharmacy defense attorneypharmacist defense lawter, representation for pharmacies, representation for pharmacistslegal representation for health care facilities, representation for health care professionals, legal defense of TRICARE providers, U.S. Department of Justice (DOJ) investigation representation, DOJ defense attorney, representation for DOJ matters, attorney reviews of The Health Law Firm, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.

Florida-Based Compounding Pharmacy Violated False Claims Act by Overcharging Tricare, Feds Claim

9 Indest-2008-6By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On July 3, 2017, a compounding pharmacy based in Tampa, Florida, charged Tricare at least 2,000 percent more for drugs than it charged cash payers, according to the government. Teh government claimed that the Florida pharmacy acted in violation of the False Claims Act (FCA), as it intervened in a whistleblower’s suit.

The government claimed that RS Compounding LLC and its owner, Renier Gobea, knew it was illegal to provide discounts to cash payers but not the government. However, the company still went through with a scheme to do it, the partial-intervention complaint says. Prosecutors are seeking triple damages and civil penalties.

The False Claims Act provisions in Tricare cases are a little different from those in Medicare cases. In Tricare cases, recovery can be had for any “fraud, waste or abuse.” It is not limited to just fraud or false claims. Abusive claims can lead to recoveries by the government and by whistle blowers.

The Whistleblower Suit.

The suit was brought forward by former sales representative McKenzie Stepe. She filed her whistleblower suit in December 2013. Stepe’s suit alleges that RS Compounding used the average wholesale price in place of the lower acquisition cost when reporting what it paid for drugs. Additionally, the company then reported the usual and customary cost of the compounded drug to be equal to the average wholesale price, and as a result the government paid more for the drug that it needed to when reimbursing RS Compounding, the complaint says.

Between January 1, 2012, and January 31, 2014, the company was charging cash customers less without telling the government, according to the complaint.

Click here to read the complaint in full.

Unfortunately, this is not the first time a Florida pharmacy has allegedly defrauded government programs such as Tricare through compounding activities. The Tricare program is a health care program that provides benefits for U.S. military personnel, their defendants and retired military personnel.

Click here to read one of my prior blogs on a similar case against Tricare.

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA, DOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.
Sources:

Kass, Dani. “Fla. Compounding Pharmacy Ripped Off Tricare, Feds Claim.” Law360. (July 3, 2017). Web.

“Florida Compounding Pharmacy Ripped Off Tricare.” Law of Compounding Medication. (July 4, 2017). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: False Claims Act defense attorney, FCA legal counsel, Anti-Kickback Statute (AKS) defense attorney, legal representation for allegations of violating Anti-Kickback Statute, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2017 The Health Law Firm. All rights reserved.

 

3 Sentenced in Florida for $175 Million Drug Compounding Fraud Scheme

11 Indest-2008-8By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On March 24, 2017, three participants were sentenced in Florida federal court, for a scheme that used call centers and kickbacks to generate fake prescriptions for compounding pharmacies. The scheme was able to scam the government and private insurers for $175 million.

U.S. District Judge Daniel T.K. Hurley, sentenced one of the defendants, Todd Stephens, to ten years. He sentenced Todd Hanson to eight years and one month. He sentenced Christopher Mucha to 30 months in prison. Each defendant also received three years of supervised release (probation) after they are released from prison.

Illegal Enterprise.

Stephens, Hanson and Mucha were among 16 defendants the federal government charged in September 2016. The U.S. Department of Justice (DOJ) described an extensive enterprise that operated from 2013 to 2015. According to the DOJ, the enterprise controlled numerous stops along the supply chain, including the selection of ingredients for compounded drugs, solicitation of patients for unnecessary prescriptions, and funneling of kickbacks to “corrupt physicians.”

To learn more about the defendants being charged, click here.

According to prosecutors, the participants purchased pharmacies that functioned as fronts for the illegal conduct and held licenses that made the operation possible. Specific drugs were chosen and produced by the pharmacies based on the amount of money reimbursed by the military health care program TriCare, as well as other private insurers. More than $175 million was eventually paid out in false claims, prosecutors alleged.

Key Component of the Scheme.

The defendants used call centers as a major part of the scheme to generate bogus prescriptions. The call center staff obtained information on potential patients, including military veterans, who had previously been prescribed medications. They then proceeded to contact the patients to convince them to authorize the faxing of the medically unnecessary prescriptions to doctors’ offices.

A group of “corrupt” physicians would then issue prescriptions for compounded medications for the patients regardless of the absence of medical necessity. It was alleged that this was done in exchange for illegal compensation to the doctors such as cash, gift cards and free consulting. The defendants disguised the illegal payments as reimbursement for “data collection.” These were allegedly distributed through a phony software company called ClinicalCorp LLC, prosecutors said.

To read the sentencing memorandum in full, click here.

To read about a similar health care fraud case involving TRICARE, click here to read one of my prior blogs.

Contact Health Law Attorneys Experienced in Representing Pharmacists, Pharmacies, and Other Health Care Providers.

At the Health Law Firm we provide legal services for all health care providers and professionals. This includes pharmacists, pharmacies, physicians, nurses, dentists, psychologists, psychiatrists, mental health counselors, Durable Medical Equipment suppliers, medical students and interns, hospitals, ambulatory surgical centers, pain management clinics, nursing homes, and any other healthcare provider. We represent facilities, individuals, groups and institutions in contracts, sales, mergers and acquisitions.

To contact The Health Law Firm, please call (407) 331-6620 or visit our website at www.TheHealthLawFirm.com.

Sources:

Hale, Nathan. “3 Sentenced In Fla. For $175M Health Care Fraud Scheme.” Law360. (March 24, 2017). Web.

McMahon, Paula. “Feds charge 16 in massive $175M prescription cream fraud based in South Florida.” Sun-Sentinel. (September 1, 2016). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: Legal representation for allegations of violating Anti-Kickback Statute, TRICARE false claims legal defense attorney, TRICARE physician representation, pharmaceutical fraud lawyer, compounding pharmacy attorney, legal representation for military physicians, fraudulent practices of pharmaceutical companies, financial interest in physician referrals, TRICARE fraud attorney, compounding pharmacy lawyer, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews, Health care fraud defense attorney, legal representation for health care fraud, legal counsel for allegations of health care fraud, AKS defense attorney, False Claims Act (FCA) defense attorney, legal representation for FCA claims, legal representation for illegal kickback schemes, health care fraud defense lawyer, health care fraud scheme, legal representation for DOJ investigations, DOJ investigation defense attorney

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2017 The Health Law Firm. All rights reserved.

Florida-Based Compounding Pharmacy Violated False Claims Act by Overcharging Tricare, Feds Claim

9 Indest-2008-6By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On July 3, 2017, a compounding pharmacy based in Tampa, Florida, charged Tricare at least 2,000 percent more for drugs than it charged cash payers, according to the government. Teh government claimed that the Florida pharmacy acted in violation of the False Claims Act (FCA), as it intervened in a whistleblower’s suit.

The government claimed that RS Compounding LLC and its owner, Renier Gobea, knew it was illegal to provide discounts to cash payers but not the government. However, the company still went through with a scheme to do it, the partial-intervention complaint says. Prosecutors are seeking triple damages and civil penalties.

The False Claims Act provisions in Tricare cases are a little different from those in Medicare cases. In Tricare cases, recovery can be had for any “fraud, waste or abuse.” It is not limited to just fraud or false claims. Abusive claims can lead to recoveries by the government and by whistle blowers.

The Whistleblower Suit.

The suit was brought forward by former sales representative McKenzie Stepe. She filed her whistleblower suit in December 2013. Stepe’s suit alleges that RS Compounding used the average wholesale price in place of the lower acquisition cost when reporting what it paid for drugs. Additionally, the company then reported the usual and customary cost of the compounded drug to be equal to the average wholesale price, and as a result the government paid more for the drug that it needed to when reimbursing RS Compounding, the complaint says.

Between January 1, 2012, and January 31, 2014, the company was charging cash customers less without telling the government, according to the complaint.

Click here to read the complaint in full.

Unfortunately, this is not the first time a Florida pharmacy has allegedly defrauded government programs such as Tricare through compounding activities. The Tricare program is a health care program that provides benefits for U.S. military personnel, their defendants and retired military personnel.

Click here to read one of my prior blogs on a similar case against Tricare.

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA, DOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.
Sources:

Kass, Dani. “Fla. Compounding Pharmacy Ripped Off Tricare, Feds Claim.” Law360. (July 3, 2017). Web.

“Florida Compounding Pharmacy Ripped Off Tricare.” Law of Compounding Medication. (July 4, 2017). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

KeyWords: False Claims Act defense attorney, FCA legal counsel, Anti-Kickback Statute (AKS) defense attorney, legal representation for allegations of violating Anti-Kickback Statute, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2017 The Health Law Firm. All rights reserved.

 

Federal Judge Refuses to Dismiss Florida Compounding Pharmacy’s FCA Suit

10 Indest-2008-7By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On December 4, 2017, a Florida federal judge refused to dismiss the federal government’s False Claims Act (FCA) suit against a compounding pharmacy. RS Compounding LLC and its owner, Renier Gobea, are accused of overbilling Tricare for prescriptions. The federal judge refused the dismissal on the grounds that the government had sufficiently backed its allegations against both the company and its owner.

Judge Finds Claims Are Sufficiently Stated.

According to U.S. District Judge Virginia M. Hernandez Covington, the government adequately pled its claims that RS and Gobea had knowingly charged Tricare prices well in excess of what it charged cash payors for substantially the same drugs. “The United States’ amended complaint in partial intervention sufficiently states claims for unjust enrichment and violation of the FCA,” the judge said.

The government had also adequately backed its allegations that RS knew it had been overpaid but had made no attempt to refund the difference to Tricare, according to the judge.

Additionally, Judge Covington rejected the owner’s argument that claims against him personally should be dropped from the case pointing to his “extensive involvement” in RS’s operations and his profit-taking from the company.

The Relator’s FCA Suit.

The relator McKenzie Stepe, a former RS sales representative, originally filed her complaint in December 2013. She accused RS and Gobea of charging Tricare, Medicare and Medicaid excessively high rates for certain compounded drugs. Those drugs, all mixtures containing the anesthetic ketamine, were charged to the government at prices of between $400 and $3,000 per bottle when the equivalent rate for an uninsured cash payer was between $15 and $45 a bottle.

The relator’s complaint was dismissed in November 2017, based on what Judge Covington said was a lack of firsthand knowledge to support her claims, but with leave to file an amended complaint by December 7, 2017.

To read the court’s order in full, click here.

To learn about a similar case involving a Florida compounding pharmacy, click here to read one of my prior blogs.

 

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA, DOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources:

Wilson, Daniel. “Fla. Compounding Pharmacy Can’t Escape Tricare FCA Suit.” Law360. (December 4, 2017). Web.

Raymond, Nate. “Florida compounding pharmacy must face U.S. fraud suit – judge.” Reuters. (December 4, 2017). Web.

KeyWords: False Claims Act defense attorney, FCA legal counsel, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews, legal representation for pharmacies, legal representation for pharmacists, health law defense attorney, legal representation for health care professionals

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.

 

Federal Judge Refuses to Dismiss Florida Compounding Pharmacy’s FCA Suit

10 Indest-2008-7By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On December 4, 2017, a Florida federal judge refused to dismiss the federal government’s False Claims Act (FCA) suit against a compounding pharmacy. RS Compounding LLC and its owner, Renier Gobea, are accused of overbilling Tricare for prescriptions. The federal judge refused the dismissal on the grounds that the government had sufficiently backed its allegations against both the company and its owner.

Judge Finds Claims Are Sufficiently Stated.

According to U.S. District Judge Virginia M. Hernandez Covington, the government adequately pled its claims that RS and Gobea had knowingly charged Tricare prices well in excess of what it charged cash payors for substantially the same drugs. “The United States’ amended complaint in partial intervention sufficiently states claims for unjust enrichment and violation of the FCA,” the judge said.

The government had also adequately backed its allegations that RS knew it had been overpaid but had made no attempt to refund the difference to Tricare, according to the judge.

Additionally, Judge Covington rejected the owner’s argument that claims against him personally should be dropped from the case pointing to his “extensive involvement” in RS’s operations and his profit-taking from the company.

The Relator’s FCA Suit.

The relator McKenzie Stepe, a former RS sales representative, originally filed her complaint in December 2013. She accused RS and Gobea of charging Tricare, Medicare and Medicaid excessively high rates for certain compounded drugs. Those drugs, all mixtures containing the anesthetic ketamine, were charged to the government at prices of between $400 and $3,000 per bottle when the equivalent rate for an uninsured cash payer was between $15 and $45 a bottle.

The relator’s complaint was dismissed in November 2017, based on what Judge Covington said was a lack of firsthand knowledge to support her claims, but with leave to file an amended complaint by December 7, 2017.

To read the court’s order in full, click here.

To learn about a similar case involving a Florida compounding pharmacy, click here to read one of my prior blogs.

 

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA, DOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources:

Wilson, Daniel. “Fla. Compounding Pharmacy Can’t Escape Tricare FCA Suit.” Law360. (December 4, 2017). Web.

Raymond, Nate. “Florida compounding pharmacy must face U.S. fraud suit – judge.” Reuters. (December 4, 2017). Web.

KeyWords: False Claims Act defense attorney, FCA legal counsel, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews, legal representation for pharmacies, legal representation for pharmacists, health law defense attorney, legal representation for health care professionals

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.

 

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